The life insurance industry is again under the spotlight, with a Senate inquiry established following a proposal by Nationals senator John Williams.

The inquiry will be undertaken by the Parliamentary Joint Committee on Corporations and Financial Services, with a report to be delivered by June next year.

Life insurance faced scrutiny in the last Parliament, when the Senate Economics References Committee sought submissions on the industry.

The double dissolution earlier this year put paid to that inquiry.

The new probe’s terms of reference include examining the need for further reform and improved oversight of the industry. It will assess all aspects of the industry, including group and direct distribution channels.

Claims management, sales practices and approved product lists will be considered, as will life insurers’ internal dispute resolution processes.

The role of the Australian Securities and Investments Commission and the Australian Prudential Regulation Authority will be examined.

Senator Williams says he initiated the inquiry after discovering the practice of refusing legitimate claims may be more widespread than thought.

“Individuals and industry people have contacted my office urging the Parliament to scrutinise the life insurance sector because it had flown ‘under the radar’ at the same time the financial advice sector was being torn apart because of poor practices,” he said.

Manager of Opposition Business in the Senate, Katy Gallagher, says Labor supports the inquiry.

“We will not stand in the way of this important work, unlike those opposite, who are blocking a royal commission,” she told the Senate.

“Labor’s preference would be for the Government to establish a royal commission into the banking and financial services sector that would put a stop to the scandals and misconduct, and that would restore public confidence in Australia’s financial institutions.

“But we will support this motion because we believe these are significant issues that should be examined by this committee.”